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Leverage

Borrowed buying power that lets you control a large position with a smaller deposit.

Leverage doesn't create risk by itself — what creates risk is choosing a position size too large for your account, and leverage is simply what makes that possible without realizing it. The discipline that matters is deciding your risk percentage first and letting that determine size, regardless of how much leverage is available.

Learn more in these lessons
risk management basics
Related terms
LotPipPosition SizeRisk:Reward Ratio